Tax Cut Town Hall With Speaker Paul Ryan FOX News November 14, 2017 3:30pm-4:30pm PST
you wanted to say? mhmmm. i have to say, you seemed a lot chattier on tv. geico. proudly serving the military for over 75 years. you ok back there, buddy? ♪ >> bret: good evening. i met -- i am bret baier. >> martha: good evening. i am martha mcallen. we are live in herndon, virginia. we are a few miles outside washington, d.c. house lawmakers are in a mad dash putting although final adjustments into the tax bill and a surprise tonight from the senate side as they work to put the repeal of the obamacare mandate into their version which is big news.
>> bret: many questions throughout the reform. tonight we are putting the power of the questions in the hands of the american people. in moments, this room full of voters will be face-to-face with one of the leaders at the forefront of this tax reform effort, house speaker paul ryan. first, let's take a look at where the two g.o.p. tax plant stand tonight. >> martha: as of this moment. it keeps changing. on the house side, lawmakers are working on the details but they hope to get a full house bill as early as thursday. on the senate side, the obamacare appeal we talked about with the huge twist tonight and would pay for roughly 330 billion toward the tax cuts. let's look at some of the differences between the two plans. you can be thinking about how this impacts you. individual income tax rates. the house wants to consolidate the current seven tax brackets and a four. senate will keep all seven tax brackets. itemized deductions, the house plans to keep state and local property tax deductions capped at $10,000 while eliminating the
remainder of the state local tax deductions which is a big issue in some of the highly populous states. this senate eliminates those deductions entirely. hugely controversial in places like new york, new jersey, california. house plan cuts the rate of corporate taxes to 20% effective in 2018. the senate plan makes the same cut but it doesn't kick in until 2019 and neither is retroactive to 2016, as many had originally hoped. >> they told us they would be no math. >> martha: [laughs] >> bret: pen the sides come to a compromise? one man tasked with trying to make sure that happens is speaker paul ryan. please welcome house speaker ryan. thanks for being here. i want to ask you about the breaking news today. >> representative ryan: thanks for having me. it's great to be here in virginia with everybody. >> bret: we are going to have good questions. let me start with the breaking news about the senate and the market on the senate side.
orrin hatch putting in a repeal of the individual mandate of obamacare. this saves 338 billion over ten years. why is it not in the house plan? >> representative ryan: we didn't want to complicate tax form and make it harder. this senate was the issue. we are now seeing if the senate has the votes to repeal the individual mandate. the house to this already. they house passed our health care bill in may which repealed the individual mandate. we are on record in favor it. i think it's a bad mandate. cranking up health care prices. we are making people buy something they don't want or can't afford. obviously we are in favor of repealing the individual mandate but we didn't want to needlessly complicate the passage of text reform given we do not have the votes before to get this to the senate. we want to see this article first and see if they can get that done. then we will discuss whether or not it gets included at the end. >> bret: do you think you have the votes now with the plan you have? and explain to people how that comes together with the senate plan.
>> representative ryan: basic civics. i'm a bill on capitol hill. you might remember that. the house has to go first. it's in the constitution bird house in ways wrote the bill, passed out of committee. we bring into the floor this week and pass it. then the senate takes the bill up and put their bill in it because that's the process. they senate is starting their committee process this week. after thanksgiving, they will bring theirs to the floor. the house will pass a bill. the senate will pass a bill on that we go into conference to many. it's a joint committee between the house and senate to reconcile differences to come up with a final unified version bill and pass it in both chambers. that becomes law. that's basically the legislative process. what we are starting in congress is the beginning of this legislative process. if they work in progress. the house has some differences then the senate bill, like you said. that's to be expected. that's always the case.
we will pass our different bells and reconcile the differences. >> bret: you have the votes for your plan. >> representative ryan: we feel great about where we are. >> martha: one of the points of contention are scenarios where some taxpayers say no, there's not a tax cut in this for everybody. one of those scenarios was written up in "the washington post." there are other similar. somebody in atlanta, georgia, a couple. the husband is a police officer. the wife is a tax manager. they have $180,000 combined income. mortgage, three kids, day care, college. they say in that scenario come they are goingo end up paying more. what do you say? >> representative ryan: i have a hard time believing that particular scenario. here's the point. the analysis is clear. there's been a number of analyses done. this tax bill for the average taxpayer in every income group gets a tax cut. this tax bill, for average
taxpayers in every state, gets a tax cut. i'm sure there are going to be people out there, higher income people who can utilize all the loopholes that are other, hire an accountant or a tax lawyer. utilize a bunch of loopholes in the tax code and by losing some of those loopholes, they may not be as well off. but the whole purpose of this is to take with the loopholes, so you can lower everybody's tax rates across the board. the whole purpose of this is to take away loopholes and give everybody a general tax cut. >> martha: let me ask you. >> representative ryan: every income on average gets a tax cut. >> martha: who is in the income bracket? $100,000? >> representative ryan: know, people above a million. extremely wealthy. very, very wealthy. utilizing different tax loopholes. 70% of americans already itemize their deductions. they don't itemize their deductions. they take the standard deduction. 30% itemize and use the loopholes. that's the highest income earners in america. with this plan, 90% of americans will be able to use the standard
deductions. you can fit your taxes literally on a postcard. by doubling the standard deduction, that says 9 out of 10 taxpayers don't have to use itemize deductions. they can take the standard deduction and get lower taxes. we are talking about the 10% of americans remaining who are very high income earners. >> martha: who pay 70% of the taxes in the country. >> representative ryan: absolutely. no dispute there. they may have a disproportionate amount of loopholes they may not get their taxes lowered. we are lowering everybody's tax rates. for the high income earner, more of your income is taxed at a lower rate and that's the people who own big businesses and we are cutting tax rates on businesses. >> bret: we have a great audience for voters from the greater d.c. area. they have questions for speaker ryan. there are independents, democrats, republicans from this area and they have specific questions about how this may affect them. let's start with wendy.
if you can stand up and say your name, where you are from. and your question. >> hi, speaker ryan. my name is wendy. as a millennial end of professor at johns hopkins university, my question is rooted in higher education access and affordability for families. currently if you work as a ta and you are a graduate student, you have money you get and you have tuition paid directly to the institution. we have right now in the qualified tuition revision provision that with the taxes, the income is not seen as taxable. with the g.o.p. and the plan set forth, it would be seen as taxable income. how do we make it so higher education continues to be affordable and accessible for all people and making sure that what this great plan, it's able to be done. >> representative ryan: great question. this is a niche piece of the tax
code. if you work for the university, you can get free tuition and that's not considered income. this would be considered income under the house version. there's a difference in positions between the house and senate. this is not what we call a major revenue raiser but we are trying to clean out the code with a lot of stuff and give everybody lower tax rates. let me give you a sense. a ta probably doesn't make a whole lot of money. i have spent a lot of time with tas when i was younger. let me give you some numbers. a single person. most tas are single. here's what ata gets. standard deduction goes to $12,000. tax rate goes to 25% to 12%. $1300 tax cut. take a look at the tax cuts in here. lowering the tax rates, doubling the synergy diction. if you have kids, the credit per child. we are basically saying instead of giving you a tax cut for one
thing you get or one thing you do at one time, why don't we lower your tax rates for all time and let you do whatever you want with your money. there's a philosophical difference. the way the code works is you pay your taxes, you do certain things. you spend your money to washington and maybe you will get some money back if you do what they approve of. in this case, it's got to be qualified tuition reimbursement system. lots of hoops and loopholes. we are saying let's get rid of the loopholes and give you your money. let people keep more of their own tax dollars in the first place. take less money out of your pocket come out of your paycheck to begin within you decide decide what you want to do. the median household in america makes about $59,000. the person who runs the household is going to get a $1182 tax cut the first year. the median family in america makes about $73,000.
two coparents, two kids. they are going to get a $1600 tax cut in the first year. what we are trying to say is let's clean it up, sophia. let people keep more than money in the first place. that's the basic philosophy behind the tax cuts and jobs act. >> martha: let's hear from a student. colin, what's your question? >> hi. i am a senior at george mason university. i'm going to be graduating this semester and entering the workforce. how will tax reform help me at the side entering the workforce and graduating? >> representative ryan: i hope you are taking economics classes. it's a great economic department. one of the best economics departments in america. first, when you are getting out and starting off, you are starting off at a new age, a starting wage. we're lowering the tax rates on the taxpayer just like you. instead of having 25%, you go to
15 and 12% tax bracket. let you keep more money, double your standard deduction so that you have a simple system. you can fill out your taxes on a form like a postcard so you get to keep more of your money in the first place. here's the thing i think is better, and this is very, very good for millennials. we want you to have more money in your pocket to start with. what we really want to accomplish especially for our youth is a healthier economy. the problem i think we've got in the economy. this is a broader statement. you have a lot of people coming out of college really in debt. a lot of debt, and they are not getting their careers they want. they are not getting the pay they need, not getting the opportunities they are hoping for. that's what you get with the slow economy. we have the worst recession in our lifetimes in 2008 and ever since then we have been limping along. we've had flat economic growth. we have been growing between 1% and 2% which was really slow.
we used to grow our economy above 3%. the whole purpose of all of this is to get our economy growing faster. we get our economy growing faster, that means we get more jobs. we get more jobs, that means you have more opportunities coming out of college to get a better paycheck. meet faster economic growth from a more jobs, higher wages. the tax foundation says about a million new jobs in the country. we are going to have over 3% higher wages. we are going to have higher take-home pay for workers across the board. on average, $2500.2900 in virginia on average because of faster wage growth. what we are trying to achieve is get out of the slow growth we've had for the last decade, get real economic growth so you can come out of college with an opportunity. this is not what i would call an opportunity economy. it's an economy where people out of college are not getting the kinds of careers and jobs they
want and need and aspire to, let alone the kind of wages to help pay off their loans. >> bret: let me follow-up. it's a great question. what do you think the greatest percent of your income that you should be taxed by the government is. i am talking about federal, state, local. what's the greatest percent? >> representative ryan: as low as we can make it. my mentor was jack kemp. i have always thought we should get it as low as possible. i think they are too high. i would love to get them lower than they are. we have parameters like the deficit and economic growth and the budget rules. >> bret: let's get another question. alfredo ortiz. go ahead. >> i have my own tax form, mr. speaker. as the president and ceo of job creators network, the voice of
main street small businesses, i would like to ask you to compare and come -- compare and contras. explain the difference between 9% and 25% small business tax rates in the house bill versus the senate bill. >> representative ryan: i recognized you on the way in. the job creators network dropped off at the capitol today petitions of 175 -- 173,000 small businesses send petitions to congress saying please pass this bill. get it done. do you know why? small businesses are where we get our jobs in this country. that's where our economic growth really comes from. they are really stagnating. they are really struggling. we are seeing more businesses go away then we are getting in the country with this bill does come of all the things were trying ts
increase small business job growth. the house bill says for small businesses, let's drop the tax rate to 9%, not 25%. drop eight to 9%. the senate bill has has a big . we say, you can -- on the net income you pay a 9% tax rate. it helps the new and young starting businesses. if you are a millennial coming out of school, this helps you because you have cash flow positive. you can write off the investment in your business and when you start making money, you're not going to get hit with a 25% tax rate. we want more small businesses to succeed and grow. we know most of our jobs come from small businesses.
that's where they job creation comes from. more small businesses growing and more jobs, it brings everybody's wages up. that's the entire purpose of all of this. >> bret: fight could boil down the question. the difference between the house and senate, there's a lot of people sayinwhich hor is getting to the finish line? >> representative ryan: i did want to get too complicated but both bills are designed to bring the top rate on small businesses down to 25%. small businesses pay a rate of 40% today. overseas, where i come from, that means lake superior. in wisconsin, we compete against canada all the time. canadians are taxing their businesses at 15%. ireland, england, china. the average tax rate on businesses in the industrialized world is 22.5%. the tax rate in america is 35. the highest corporate tax rate in the world.
the tax rate on successful small businesses even higher than that. over 40%. here is what's going on. we are losing in global competition. american businesses are fleeing our shores in going overseas. the biggest company we used to have in wisconsin, headquartered in wisconsin, johnson controls. it's about 66 degrees in this room right now. it's not so hot with the lights because it's a probably a johnson controls thermostat in here. that company is no longer in milwaukee, wisconsin. it's an irish company. there rate is 12.5%. burger king is no longer an american company. it's a canadian company. i can go on and on and on. the point is when you tax your businesses at higher tax rates in your foreign competitors, they win. we lose. we are losing jobs, losing companies, losing headquarters. they are moving overseas or foreign companies are buying
u.s. companies. we are saying is let's get the tax rate from the 40s to the 25, no higher. for the smaller small businesse businesses, the ones that are the mom and pop, bring those rates to 9%. senate bill doesn't go that low. set of bills let's get to 25 and no higher. people will make, as they make money, they pay lower tax rates. we go down from i think 12% in the senate and 9% in the hospital. we both acknowledge you have to get tax rates down because we are losing global competition. >> martha: we are going to take a quick break. i want to ask for a show of hands. if you are in this group tonight and you think you might end up paying more under this plan, raise your hand. all right, we are going to get speaker ryan to answer that question for those folks who are
concerned they are not going to get a tax cut when we come back. there's going to be more of our tax reform town hall with speaker paul ryan. we're going to tackle the issue of income equality. answers to the questions right after this when we come back to herndon, virginia, . when you have a cold...
>> i believe in both spirit and substance our tax system has become a burden. by lowering tax rates although at the income scale, each of us will have a greater incentive to climb higher, to excel, to help america grow. the power of these incentives would send one simple, straightforward message to an entire nation. america, go for it. it is a good musical >> martha: go for it, america. welcome back to our tax reform town hall with speakerphone rya ryan. live in herndon, virginia, president reagan 1986 attacks are from act, one of the benchmarks for president donald trump at the republicans in our tax reform overhaul, but the new g.o.p. plan takes it further by lowering taxes to foster economic growth. that is definitely the plan, will it work? back now, house speaker paul ryan, and we -- i want to
get the folks who raise their hands the last time around who said that they're worried it might actually end up paying more. who is out there in that category? some people got shy. you stand up in the back, sir. we got a mic on you, great. explained to speaker paul ryan why you look at the numbers and you are afraid you might actually pay more. >> my name is dan and i'm old enough to remember ronald reaga ronald reagan, and what he was trying to do with tax cuts. i've got a mortgage, i got a kid was going to going to college next year and pay a lot in state taxes, local taxes, et cetera. >> speaker ryan: where do you live again? >> just up the road. so my concern is that some of the deductions are taken away, it's not going to balance out.
so i think i will end up paying more. the other piece of it, my original question was actually about income inequality, and particularly with looking at with ronald reagan's tax cuts, it's only gotten bigger, income inequality. more folks at the top are making more money, more folks at the bottom, the trickle-down just hasn't trickled all the way down. it's been 30 years. and when we take a look on your website, you call out at&t is committing to investing a billion dollars in america, which is great, but by cutting the rates from 35 to 25%, they are actually saving $3 billion a year. 30 billion over the ten years that this tax proposal is out there. i really don't see how it's a good deal for americans. >> speaker ryan: i will take both, is not all right? >> martha: please. >> speaker ryan: on the first one, i encourage people to go look at our website, take a look
at the website so you can see how it works for yourself, so you can do your own kind of math. here's what this basically does, just like what ronald reagan said. he didn't say it in that speech, but i remember it vividly. i studied that moment. i was getting my driver's license the year heated tax reform, that the last time we did this. it's been 31 years, and what has happened in the subsequent 31 years as more and more special interest loopholes have found their way back in the code. for lawyers and lobbyists and special interests have come to washington to get their niche in the tax code so that if you engage in what they want you to do, you will get some of your money back. as a result, everybody else pays higher tax rates. everybody else pays more tax, taxes and higher rates. our whole theory, just like ronald reagan, is let's stop picking winners and losers, let's get rid of a lot of these discrete loopholes, which are disproportionately enjoyed by very high income people, the people who itemize, and use that money to lower rates across the board. i'm not going to ask you your personal financial information,
i don't want to violate your privacy on national television, but here's what i would do if i was doing the math in my head. i would first of all say doubling my standard deduction, i don't know if you are married or not, but if you are a family you go from -- okay, he's got his ring. there we go. >> martha: he can prove it. >> speaker ryan: that means you go from $12,700 to $24,000 tax-free, first $24,000 tax-free off the bat. if you're single you go from $6300 to $12,000, first 12,000 tax-free. for these millenniums, you don't pay taxes on my first 12,000, or in your case the first 24,000. then, if you have kids, your per child tax credit goes from $1,000 to $1600 per child. take your number of kids, multiply that by $600 and you get that one per year. then take a look at tax rates that go down. it's kind of what you just mentioned, the president was pretty clear with us about this as well.
he wanted to make sure that the vast majority of the tax relief goes to middle income taxpayers. the vast majority of tax or look goes to people who are struggling in this country. and that is why the tax rates reduction occurs to the people who are low and middle income people, and that top tax rate in the house bill doesn't go down. it goes down a point in the senate bill, but we send anyone to make everyone's income taxed at a lower rate. do those in your head, lower tax rates, bigger per child tax credit, doubling the standard deduction. that says keep your money in the first place. with the statistics show, whether it's the joint committee on tax, tax policy center, all of this analysis says every taxpayer in every income group gets a tax cut. i just mentioned, we are in not a real high tax state, i wouldn't call virginia a high tax state, but let's take a person in a high-tech state, because we are there. so you make $115,000 in income and you have an $8400 in
mortgage interest payments, $6900 in property tax payments. that's a common thing you hear these days, that family will get a $1,130 tax cut. even with all of those things, on the mortgage interest deduction, you kind of mentioned that part, first of all, your mortgage is grandfathered right now, so nothing happens to anybody who has an existing mortgage. nothing has changed for that. i'm going forward, it says for the first $500,000 of your mortgage, you can deduct that interest. two-thirds of all americans own a home, and two-thirds of all of those americans have a mortgage. and 94% of those people have a mortgage less than $500,000. if you look at the total statistics, 2.5% of all americans have a mortgage above $500,000. what this is designed to do is make sure the people in the middle get the biggest breaks. let me say at a different way, and this is something i think is one of the most profound things
we are trying to get out with this. it's what i said earlier. the economic anxiety we have in this country is palpable. it's really bad. if what i mean what i say that is when you have such a slow-growing economy for so long, people start losing hope, people start feeling like they are not going to get ahead. 78% of the people surveyed in this country are living paycheck to paycheck. 57% of the people surveyed in this country say that they wouldn't even have $500,000 in savings to pay for a $500 emergency. when you got that many people in this country living paycheck to paycheck and that many more people just one disaster away from living paycheck to paycheck, we have a problem in this country. so the focus of this, get the economy growing faster so wages go up. give people a tax cut so they have more money in their own pocket. the median household gets $1182 tax cut. living paycheck to paycheck that
happens a lot. that helps restore content, confidence in his country. on income inequality, the best thing you can do to reduce income inequality is to grow this economy and get people into better jobs with higher wage growth. the people at the top are doing great. hope wall street is on a tear. that's not the issue, the issue is people struggling getting ahead, are people struggling getting an economy getting a job with better wages, you only get that with faster economic growth. the last point i will say, if we keep kicking american companies overseas, if we keep telling american businesses don't be here, it doesn't make sense to make things here, they won't. so in this global, 21st century economy, very different than the days ronald reagan had, we've got to be able to compete with the rest of the world, china and england and japan and you name it. and we are not right now. that's the point i'm saying. when at&t said they will put a billion dollars investment in this country, i think that works exactly right. i talked to the head of intel.
everybody knows what intel's, microprocessor in your computer. they got 50,000 employees in america. they did the numbers. this current tax code says if they just outsource their factories and move them overseas they would save $2 billion over ten years per factory, just moving it to another country. that's what our current tax code is telling american businesses. we want to reverse that and we want to tell american businesses stay in america, it pays to stay in america, it makes sense to pay it till next day in america and that's what we do it this way. lower their tax rates, let them write out their investments in the country so they build things in this country, hire more people. if you get that kind of economic growth, that kind of job creation, wages go up and you can reduce income inequality. >> bret: another question from the audience. audi? >> speaker ryan: very important points. >> i'm 19 from los angeles, california. my question is, nonpartisan research has said that
president trump's tax plan would actually decrease the national gdp after about seven years as opposed to what he has promised. the interest payment on the national debt would consume a large portion of the federal budget. so wouldn't it make more sense to use that money towards infrastructure and job creation that he has always been talking about? >> bret: lets explain that, because if you get the engine going, the thought is interest which would go up. if interest rates go up even just a point, he's right, we pay more on the national debt interest then we would be paying for the pentagon. >> speaker ryan: i definitely dispute the analysis that this would cause interest rates to go up. there's a long debate on this issue, i won't get into the metrics, only to say that i think analysis that in the global capital markets today, this would not cause an interest rate increase, far from it. by getting faster economic growth and more jobs, i think you stabilize your situation.
number two, that is a perfect example of a car because of economic analysis that has been done, and what they have said is the economic growth that this would produce would give us about a trillion dollars in extra revenues just from the economic growth that it would produce. i really just dispute the notion that cutting people's taxes and cutting tax rates would do that. there's a big debate about econometrics, only to say that i think history is proven that that point is not accurate and i think the economics field has been pretty clear on it you do this, you will fix economic growth. i will say at this other way, if we don't get our act together as a country, and if we don't start treating our businesses in a hospitable way and letting small businesses survive and strive and letting big businesses give them incentive to stay here instead of leaving her, it's going to get worse. that's what i'm worried about, it's going to get worse, more companies are going to go
overseas and we will be stuck with nothing. so that to me is really important. and if you give these businesses the incentive to stay and hire people, the whole purpose of this is you stay here, you invest in your people and your factories in your equipment, and hire people to run that factory and that equipment, you will get a tax break for that. you will be able to write that off. we think that's really good, only really do not believe that that will lead to higher interest rates. >> martha: we want to go on the person here. if the economy is so fired up that you to worry about interest rates, that's a good problem. let's go to paul there's paul. what's your question for speaker ryan? >> i have a very complicated question when it comes to small businesses. you spoke about 9% and 20%, but if your taxes for your business are going through your personal income tax, then if you are making a certain amount you will make -- you will pay taxes higher than that. in the issue we have is we need
that money for capital, for growth, and then at the end of the year we have to pull money out of the business as a bonus, or into your payroll just to pay the taxes for the company. then we turn around and pay taxes on the tax money we're spending. how was the new tax plan going to fix this? >> speaker ryan: a great question. i will try to simple for the best i can. there's took a basic kinds of businesses in america. the corporation like at&t, really sort of the big ones, and that's 20% of american businesses. 80% of american businesses are what we call pass-throughs, like you just described. they pay their taxes on the individual side of the tax code so today that top effective tax rate is their tax rate. that's why i say successful small businesses are paying over 40%. that's because the income tax rates go above 40% in america. what we are trying to do here is safe to make sure that the business, that business income gets there tax rate down to 25%.
here's how it works. you have an llc, sub s, just a simple fight. his corporation, which is most businesses in america, he pays the individual tax rate, so he might be competing with a corporation at 35%, he could be at 44.6% right now today. we are dropping both those rates by 40%, so that business income is taxed at 25%. at your wage and salary income is taxed at the income tax rate. your business gets taxed at 25%. here's the rub, and this is the key question, how do you distinguish between the two? how do you make sure you have good rules so that people can't use a tax shelter to shelter their ordinary salary income into a sub s or llc and drop their tax rates? how does aaron rodgers -- >> bret: you had to go there? >> speaker ryan: the most extensive quarterback. >> martha: woven in one way or the other. >> speaker ryan: i always weave the packers in somehow.
i was, my aaron rodgers test. you don't have a system where aaron rodgers can start up aaron rodgers llc and his multimillion dollar check to the packers goes to that and he can drop his taxes to 40%. you have to have a system against sheltering your income that way. get a roll, and are different roles we use to make sure that the business gets its taxes down to 25% so it can compete. >> bret: and both plans do that. >> speaker ryan: both plans do that with different cards of roles, but they achieved the same objective. >> martha: lots more questions. don't go anywhere, these northern virginia voters for house speaker paul ryan tonight, and so do we. what does all this mean for you, for your family? when we come back. moments away with more from virginia tonight. [applause] ♪ stroke due to afib, a type of irregular heartbeat not caused by a heart valve problem. but whatever trail i take, i go for my best. so if there's something better than warfarin, i'll go for that too. eliquis. eliquis reduced the risk of stroke better than warfarin,
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>> the forgotten men and women of our country will be forgotten no longer. [cheers and applause] ♪ >> bret: that was president trump at his inauguration just ten months ago, hard to believe ten months ago. promising his tax reform plan will be for every american, but obviously not everyone is feeling that way about the current republican tax bills, at least when they are getting into the weeds, let's get back to our audience. we have rebecca. she is a former democrat who
voted for donald trump. rebecca, where are you? there you are, way back there. you have a question for the speaker? >> you bet. from the great state of maryland. mr. speaker, first, i have to say i am impressed. this is clearly an issue for you that is from the heart, isn't it? you got your facts and figures, but it really matters to you. i know we've been over this, but i want you to really break it down for me. i am a successful small business owner. i pay that ouch tax rate, so my question to you is does this tax plan really help women-owned, minority-owned, and especially veteran-owned small businesses? will help them grow? >> speaker ryan: are you a sub s corporation? i want to understand her structure so i can answer it specifically. it's basically what i said before. if you are any business, and we don't distinguish between who owns the business, but if you own a small business, right now
your top effective tax rate can go as high as 44.6%. that's crazy. i don't know what maryland's income tax rate is, but i have to think it's kind of funny. probably more than five or 6%. she has taxed over 50% on her small business. it could be, i don't know what your actual tax rate is, but her business could be taxed that high. how was she going to be able to compete in a global economy, or how was she going to be able to compete in the local economy? i don't know what kind of business you have, but if you have to compete with other businesses that use tax loopholes that don't pay those kinds of rates. the whole point of this is to make the system fairer and simpler and lower those tax rates. for these small businesses, we are saying take that small business income and drop its tax rate and get it down almost 40% down to 25%. we have to have these rules to make sure not just everybody on the brother can all of a sudden declare themselves a small
business and get their tax rates dropped. we have to have important roles to guard against that, but the whole purpose of this is to get those tax rates down, that's number one. number two, we say to these small businesses, you can invest in your business, buy equipment, buy a car, buy a van, by computers, buy whatever it is you do, and you can write off 100% of the cost of that investment in the year you do it. we call that expensive. for small businesses, 100% full expensing so that you will do that. then we say, as you work your way up the income scale, if you're just starting, if you are just starting a business, don't tax you at 25%, text you at 9% after your expenses because you can write off all of your investments in a plant and equipment. what that does is it helps nurture small businesses to get up and started. small businesses that are just getting formed, they don't have cash flow, not a lot of income.
you want to give them the break so that they can build their business and start getting cash flow and start getting income and don't smack them with a high tax rate when they are just getting successful. nurture it and then to top their tax rate ideal at 25%. >> bret: in some of these big states state and local taxes on the individual is a big deal. you take that out, the senate plan does not. >> speaker ryan: they take it out completely. >> bret: they take it out, but you still have it and i'm saying. >> speaker ryan: here's what we say. because we want to get everybody's tax rates down across the board in the analysis shows us that taxpayers in all states get a net tax cut, but there are clearly going to be individuals that utilize really big deductions that may not do so well. we believe everybody will benefit for two reasons. every income group on average gets a tax cut, but the economy is going to grow, you will get faster wages. if you are a high income individual with a big tax touch
you probably invest in a corporation, those tax rates go down. we are lowering your tax rates all the rate down on every dollar you make up to that really high tax rate. there is the point i would say. we look at the numbers and 90% of all americans pay less then $10,000 in property tax. so we are saying let's keep the property tax deduction for individuals up to $10,000 because we can capture just about everybody in america. we are saying in addition to having your higher per child tax credit, in addition to doubling your standard deduction, in addition to lowering your tax rates, let people have their first $500,000 or more, write that interest off, and in addition, let people write up $10,000 -- up to $10,000 of their property taxes. that helps especially people in those high tax states. i've got friends and family in maryland, i know that's one of those states. they have really high property taxes. we want to make sure that people enjoy this across the board, and that is why we added back into the legislation in the house, to
be sensitive to people in those hi tax stes, the additional ability to write uyour property taxes up to $10,000. do those things, and that means the vast majority of people in all these places are better off. >> martha: people in new jersey, new york, illinois, california, they are very upset that they are losing the majority of that state and local tax deduction. they are saying why does it have to be on our backs? why, for example -- why doesn't the government cut spending? >> speaker ryan: we lose it where i come from too. here's what it is. you could either stick with the current code and all these different tax deductions. or you remove these tax deductions and lower everybody's tax rates across the board. yes, if you have a very high tax states, that deduction is richer for you. because your state -- the cost is higher, that means you have a higher deduction. let's take new york versus wyoming. i suspect that wyoming's taxes are probably lower than they are in new york, so that tax
deduction is probably not as valuable for a person wyoming as it would be in new york. it's really important when people look at this in totality, by doubling the standard deduction, letting people write off $10,000 of the property taxes, lowering their tax rates, you are seeing benefits across the board for all families across the income scale. >> martha: corporations get to keep the state and local tax deductions, right? >> speaker ryan: corporations are taxed differently. >> martha: in some cases they get to. >> martha: they go from 35% down to 25% and they have full expensing. you don't write off that, corporations write off their plant and equipment investment. when they buy a factory or equipment, that they can write off. >> martha: one more quick then, in terms of spending cuts, that isn't on the table at all right now. you are finding ways to pay for the tax cut, and a lot of people want to know what one of those ways to pay for it isn't to cut spending here in washington. >> speaker ryan: is a very, very good question. we passed our budget and spending -- health care bill in
may in the house, unfortunately the senate didn't follow through on that. we have three plans for getting at this, but this particular one is tax relief and tax reform. we are going to keep focusing on spending cuts. at the house has passed 380 some bills, many of them focusing on his issues. we just got a break from the senate. they have different rules, thinner majority. we pass a big spending cut bill in the fall or in the spring, we will go back at that next year. but what we don't want to do is complicate the issue of the tax cut and jobs act. cutting taxes for people and reforming our tax system so we can have faster economic growth and more jobs as the sole of this. we weren't going to bring in all these other issues, we have to focus on spending cuts as well. believe me, that is something we have to keep working on. >> bret: it's a different focus for a guy who five years and a week ago was campaigning in front of eight national debt clock a lot, it's a different focus for you. >> speaker ryan: two things you have to do to get this debt under control.
cut spending, most importantly reform entitlement programs, and grow the economy. you cannot get the national debt under control, you cannot get that deficit under control if you don't do both. grow the economy, cut spending. this grows the economy. we've got a lot of work to do and cutting spending. budget we passed in the house is a great budget, most conservative with our past, it felt like $7.4 trillion in spending. we've got more work to do to get those things beyond just passing the house. we got to grow the economy, and disclose the economy. this grows the economy, it will create about a million new jobs according to the tax foundation. bigger paychecks, more take-home pay after taxes, faster economic growth. if you have faster economic growth, that brings you more revenues. >> bret: let's get another question. >> martha: shannon. shannon are you back there? >> bret: there you are. >> martha: there you are, what is your question? >> shannon, a navy veteran. >> bret: we didn't plan that,
by the way. >> speaker ryan: did you ever go to the tp? >> yes. >> speaker ryan: the close to town. supper clubs in wisconsin. >> bret: we knew this was going to take time. >> mr. speaker, history has shown that tax reform does grow economy. it generates higher wages, more jobs and it grows the gdp. as a veteran and now a mom, i want to know that when my son comes home and the men and women he serves with her going to come home to a growing economy, a robust economy, and that they will have those jobs that they deserve when they hang up their uniform for the final time. if the tax cut and job act is passed, how to mix and you think we can expect to see the growth in the economy? >> speaker ryan: i think we can see it beginning the first of the year. what we would do based on the way we wrote the house bill is you would see withholding improve right away, meaning her son comes back and he gets a job, that means we are dropping taxes on him immediately januare
envision is lowering withholdin withholding. get the employer to take less out of their paycheck so they get a bigger paycheck right in the beginning. that puts more money in his pocket. number two, getting these tax rates done on these businesses, encouraging them to invest in their people and their factories by writing it off immediately starting right now. that will get more jobs, faster economic growth, but with veterans in particular, we just passed this today, the defense bill. we had the highest pay raise in about a decade, 2.4% increase for the military. we just passed that tonight, like two hours ago. but also we have the g.i. bill and we think this is really important, and we expanded the g.i. bill. the old g.i. bill from world war ii, guys that came back, the military pay for their college. we reconstituted that bill and now it is lifelong. if he wants to take a pause and go work for ten years, he can still in ten years get the g.i. bill and go back to school and
go back to college. with our veterans in particular, we want to make sure that we smooth the path for them to go get the education they want so they can get the career they deserve, the career that they want. if you have to have a faster growing healthy economy to produce the jobs that have those careers. that is the purpose of getting this economy growing and getting the tax cut and jobs act passed. >> bret: thank you, thank you very much. i want to ask one quick question, ten seconds. can you commit one way or another whether a daca fixes in the spending bill tonight? >> speaker ryan: we are planning on doing that separately. >> bret: so not december 8th? >> speaker ryan: correct. we are planning on keeping that separate from spending. >> bret: a curveball at the end. >> speaker ryan: i get a lot of them. >> bret: thank you very much for your time. speaker paul ryan answering your questions tonight. >> martha: thank you. >> bret: that concludes our town hall. we want to thank the speaker here and this wonderful audience here in herndon, virginia, tonight. >> martha: thank you very much. you everybody for being with us
this evening. "the story" begins just now. half hour tonight. coming up after the break, trey gowdy, very active today and jeff sessions theory, joins me with his exclusive reaction to what happened on capitol hill. a lot of new developments on that this evening. also roy moore reacting to the growing calls for him to step aside in the alabama special election. karl rove will join me in moments on that as well. also, the breaking tax reform goes on capitol hill, all that and more coming up. just a few minutes, stay right where you are, we will be right back with that. >> bret: great questions. have a good show, martha. [applause] ♪ what started as a passion... ...has grown into an enterprise.
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♪ >> martha: breaking tonight, attorney general jeff sessions in the hot seat today on capitol hill. lawmakers grilling him on everything from russia meddling in the 2016 election, george papadopoulos' bombshell admission to news that the doj that might investigate that uranium one deal, tied to hillary clinton and barack obama. a good evening once again, i martha maccallum, "the story" starts now from herndon, virginia. the heated judiciary hearing taking place about 25-mile east of here. sessions under fire today for his previous testimony about his knowledge of the term campaign staffers and connections to russia. at the heart of the matter is